Absa chair promises to make strides in transformation in 18-24 months

03 June 2022 - 21:54 By Nick Wilson and Thabiso Mochiko
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Absa Bank chair Sello Moloko has promised to make significant strides in race and gender transformation at senior levels in the next 18 to 24 months.
Absa Bank chair Sello Moloko has promised to make significant strides in race and gender transformation at senior levels in the next 18 to 24 months.
Image: Freddy Mavunda

Absa Bank, SA’s fourth biggest bank by market capitalisation, has promised to make significant strides in race and gender transformation at senior levels in the next 18 to 24 months.

Speaking at his first AGM as chair on Friday, Sello Moloko said while the bank had “made progress at several levels in the organisation” there was “work to be done in terms of race and gender transformation”.

“We have engaged with important stakeholders, including several black business organisations explaining our transformation imperative, how important this is to the board and the executive, and our approach in ensuring that we achieve this particular challenge.”

Moloko said that in its engagements with these organisations and other stakeholders, Absa had “indicated our commitment to be able to demonstrate significant progress at senior levels in the next 18 to 24 months”.

Responding later in the question and answer section of the AGM about whether  the board would be considering increasing race and gender transformation targets, he said “the issue of transformation was an ongoing matter and the issue of diversity and inclusion is something we are serious about coming from board level all the way down inside the organisation”.

Referring to the departure of key women from the board such as Wendy Lucas-Bull and Punki Modise, Moloko said: “We do realise we have regressed and it is a matter as we refresh the board, we will continue to address and look at and make sure we remain properly representative and also within the business. It’s an imperative.”

Lucas-Bull stepped down as chair at the end of March after she completed the maximum nine-year tenure for that position. 

Modise was on the board as interim CFO after CFO Jason Quinn was made interim CEO when Daniel Mminele resigned as CEO in April last year.   

She stepped off the board near the end of March after Quinn returned to his post when Arrie Rautenbach was appointed permanent CEO.

When Absa announced the appointment of Rautenbach in March this year, the Public Investment Corporation (PIC), which holds more than 5% of Absa’s stock, said it was “downright” disappointed in the bank and that it had missed an opportunity to commit to transformation.

Absa said at the time that it took PIC’s “concerns seriously” and would “continue to engage them constructively”, but also defended its appointment of Rautenbach citing his track record in business performance and his ability to deliver on group objectives.

Meanwhile, independent analyst Jimmy Moyaha said Absa has been slow in transformation and for the longest time had a problem with internal grooming and succession planning.

Moyaha said before it appointed Rautenbach, it was a really good opportunity for it to promote along transformation lines.

 “One can’t help but wonder if they are being forced to do it by things such as mandates and government legislation forcing their hands more than they really want to,” said Moyaha.

Farai Mapfinya, chief investment officer at Aequalis Asset Managers, said banking is a very competitive segment of the market and “our sense is that there is a lack of skills”.

“What bothers us is the level of exits from Absa to competitors. It reflects some internal shortfalls on organisational culture and leadership.

“We however also have to be careful not to accept token appointment to meet transformation targets. Quite a number of banks have done so successfully and succession planning is a long term and evolving game Absa hasn't got right for a while now,” Mapfinya said.

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